THE FUTURE OF CONNECTIVITY IN IOT DEPLOYMENTS - DELOITTE
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The Future of Connectivity in IoT Deployments
Investing in Germany | A guide for Chinese businesses 02
The Future of Connectivity in IoT Deployments
IoT & Connectivity 04
Market Overview 07
IoT Connectivity Use Cases 13
Long Term Implications 17
Business Implications 18
Summary 19
03
Investing in Germany | A guide for Chinese businesses
IoT & Connectivity
Like a wildfire racing across the dry prairie, the Internet of
Things (IoT) is expanding rapidly and relentlessly. It sounds
like an incredibly complex, but putting it in simple words, the
Internet of Things (IoT) is nothing but a network that connects
physical objects, such as vehicles, machine tools, street
lights, wearables, wind turbines, people, and other devices,
via connectivity solutions in order to enable communication,
exchange data, and derive actions.
With the underlying goal of having access things will be in use worldwide by the end
to relevant information in real time (or at of 2017, up 31 percent from 2016, and
least near real time), IoT sensors trans- that the number will reach 20.4 billion by
form analog inputs into digital signals and 2020.1 Dell’s CEO estimates that as many
thus create a digital reflection of what as 70 billion connected devices will exist
is happening in the physical world. This by 2020.2
setup enables the development of intelli-
gent applications and services and allows As IoT grows, so do the volumes of data
objects to be sensed and actuated across produced by some estimates, connected
existing network infrastructures. devices will generate 507.5 Zettabytes
Developments in the IoT field happen at a (ZB) of data per year (42.3 ZB per month)
breathtaking pace, and IoT is the source of by 2019, up from 134.5 ZB per year (11.2
many promising business opportunities, ZB per month) in 2014. (a Zettabyte is
which are expected to result in yet unim- 1 trillion Gigabytes). Globally, the data
aginable increases in efficiency, accuracy, created by IoT devices in 2019 will be 269
and economic benefits across organiza- times greater than the data being trans-
tions, industries, and markets. Moreover, mitted to data centers from end-user
IoT leads to new business models, moving devices and 49 times higher than total
the focus from products to services. data center traffic.3 Currently, only 30% of
the data created in areas like the supply
The number of physical objects that are chain is leveraged for optimization, but it
connected via the Internet of Things is expected that this number will increase
increases at a tearing speed. Gartner, significantly in the future.
Inc. estimates that 8.4 billion connected
1
Gartner | Press Release Feb 07, 2017
2
Marketplace.org | By 2020 there will be 10 web-connected devices per human
3
Deloitte | Tech Trends 2016
04
The Future of Connectivity in IoT Deployments
Looking at this incredible increase in glob- It is worth mentioning that each connec-
al data from IoT devices, several crucial tivity solution has its own strengths and
questions should present themselves to weaknesses, and obviously, there really
IT decision-makers: How can all this data, is no ‘one size fits all’ approach out there,
generated by sensors attached to 'things', as all connectivity solutions are tailored
be transferred efficiently into data-pro- to specific use cases and fields of applica-
cessing applications and turned into smart tions. Rather, it is important to understand
decisions? What connectivity solution is the variety of options available and the
the cheapest/fastest/most reliable one? factors that influence the decision, such as
Which connectivity solution should organi- network costs, required battery life, data
zations choose in order to leverage IoT po- rates, latency, mobility, range, coverage,
tential in their environment and what does and many other factors that need to be
the selection process look like? What data balanced when it comes to the connec-
do companies even transfer, and what can tivity selection process for a specific IoT
be processed locally? How can decisions application within the company. In addi-
be standardized for communication based tion, requirements for the underlying use
on use case requirement mutualisation? cases of an IoT application are likely to
change during its life cycle, as the vol-
Due to the seemingly endless variety of umes or selection of data gathered from
IoT applications available, organizations machines etc. might need to be adjusted
struggle when it comes to an appropriate once patterns have been analyzed.
selection process of the right connectiv-
ity solution in their specific business use Taking a safari into the confusing jungle of
case. Current connectivity solutions for connectivity solutions for IoT applications
IoT extend from low-range connectivity in order to make informed decisions and
solutions, such as Bluetooth, via familiar understand the current and future land-
technology like cellular connectivity to scapes might eventually reward organiza-
completely new concepts provided by tions with a cutting-edge advantage in the
less-known or new providers and allianc- Internet of Things.
es, such as LoRa or Sigfox.
In this paper, Deloitte will present its point
of view on the current market of technol-
ogies, expected connectivity trends, and
relevant IoT connectivity solutions for dif-
Due to the seemingly endless ferent use cases, as well as the impact that
different IoT connectivity solutions may
variety of IoT applications available,
have on a company’s IoT applications and
business success. The paper will focus ex-
clusively on common connectivity stand-
organizations struggle when it ards rather than details of different proto-
cols and systems. It is therefore the right
comes to an appropriate selection
information source for IT decision-makers
who currently have little or no knowledge
about IoT connectivity and are aiming to
process of the right connectivity gain a broad overview in this area.
solution in their specific business
use case.
05
Investing in Germany | A guide for Chinese businesses 06
The Future of Connectivity in IoT Deployments
Market Overview
A wide variety of IoT connectivity standards Connectivity solutions for IoT can be struc-
are already available in the market. tured into two high-level categories: wireless
and wired connectivity solutions. From
In general, standards vary in their technical these two main choices, wireless solutions
specifications, which determine the specific can be further divided into long-range and
IoT use cases that can be served by any par- short-range connectivity standards. Long
ticular connectivity solution. Some of these ranges go up to 200km (HSPA), whereas
specifications are: short-range solutions cover a maximum of
approximately 100m (Bluetooth Low Ener-
•• Frequency gy). Long-range connectivity solutions can
then be further subdivided into licensed
•• Max data throughput (data rates) (cellular) and unlicensed standards, known
as LPWAN (Low Power Wide Area Networks).
•• Latency
•• Battery life in connectivity modules
•• Manufacturing costs of connectivity
modules
•• Maximum data range
•• Coverage
•• Mobility
•• Security
•• Scalability (Mesh Network Availability etc.)
•• Robustness
•• Mobility
The following part will provide a high-level
overview of different connectivity solutions,
potential fields of applications, and technical
specifications.
07
Investing in Germany | A guide for Chinese businesses
I. Wireless Solutions
1. Short-Range Solutions the differences in potential use case are
Short-range IoT connectivity solutions substantial. A solution that comes with an
transfer data over small physical distances, even lower range and bandwidth is called
with the distance between the ’thing‘ that Z-Wave. Transferring data at a frequency
collects data and the gateway that process- of 900 MHz, the connection is very energy
es it (or sends it over the internet to anoth- efficient and gives a long battery life in the
er platform) usually less than 150 meters. connectivity hardware.
A frequently used example that is currently Typical fields of IoT applications for short-
available is Bluetooth, which uses a fre- range connectivity solutions are wearables
quency of 2.4GHz to achieve a maximum and smart waste management in smart city
throughput of approximately 2 Mbps. ecosystems, as the distances between the
Another well-known short-range solution 'things' and the next gateway are usually
is Wi-Fi (at either 2.4 or 5 GHz), which has a very short. As an example, the city of Vien-
maximum range of only about 50 meters, na, which received the “Best Smart Project
but transfers data at much higher speeds 2016” award, uses Bluetooth in its smart
of up to 600 Mbps, depending on the Wi-Fi parking concept.4, 5
standard. However, it should be mentioned
that there are some security issues related The following table provides a more de-
to the Wi-Fi standard. Comparing Bluetooth tailed overview of current short-range
and Wi-Fi, it already becomes clear that connectivity solutions:
even among short-range IoT solutions,
Tab. 1 – Detailed overview of current short-range connectivity solutions
Max. Max. Power
Solution Frequency Range Throughput Latency Topology Consumption Use
Wi-Fi HaLow
Various Smart lighting,
(IEEE
(sub-1 GHz) 1 km 40 Mbps 100 ms Mesh Low smart HVAC,
802.11ah)
security systems
Bluetooth Mobile phones,
2.4 GHz 100 m 2 Mbps 6 ms Point-to-point Low
Low Energy gaming, wearables
Smart lighting,
Z-Wave 800-900 MHz 100 m 100 kbps N/A Mesh Low thermostats,
locks, sensors
Lighting controls,
Zigbee 2.4 GHz 100 m 250 kbps 10 ms Mesh Low smoke and CO2
detectors
Commerce, smart-
NFC 13.56 MHz 10 cm 424 kbps 100 ms Point-to-point Low
phone automation
4
Wirtschaftswoche | Wettrennen um die Stadt der Zukunft
5
Der Brutkasten | Payuca: Wiener Smart Parking-Startup startet Testbetrieb
08
The Future of Connectivity in IoT Deployments
Tab. 2 – Detailed overview of current long-range connectivity solutions
Max. Max. Power
Solution Frequency Range Throughput Latency Topology Consumption Use
GSM/ GPRS /
384 kbps 0.15–1 s High
Edge
UMTS/ HSPA 10 Mbps 0.2–0.4 s High
Smart metering, as-
set tracking, sensors
LTE CAT 1 10 Mbps 0.05–0.1 s Medium
Various
Up to
LTE CAT 0 (Depending 1 Mbps N/A Star Medium
100 km
on region)
EC-GSM-IoT 2 Mbps 0.7–2 s Medium
LTE Cat NB1 Health monitoring,
250 kbps 1.6–10 s Low
(NB-IoT) smart cities, sensors
LTE Cat M1
1 Mbps 10–15 ms Low
(eMTC)
2. Long-Range Solutions At this point it is worth mentioning that Typical fields of IoT applications for cellular
a) Cellular connectivity costs are sometimes meas- connectivity solutions are smart meters
Cellular provides solutions for IoT solutions ured relative to the overall cost of a 'thing', and retail point-of-sale terminals, as these
that require long-distance data transfers which explains why some companies might applications rely on low latency and are
combined with low latency. While cellular choose to connect an expensive machine located in areas covered by most cellular
is clearly capable of sending high quanti- via cellular standard, as the potential cost companies. An example is Trilliant, a com-
ties of data, especially for standards such savings from switching to a cheaper con- pany that focuses on smart energy and
as 4G, the hardware costs, maintenance nectivity standard are minimal in relation to provides several smart metering systems
expenses, monthly costs for rates and data overall machine costs. that use cellular connectivity standards.8
plans, and the power consumption of older
LTE releases will be too high for many IoT One important advantage to consider The table above provides a more detailed
applications. However, cellular standards in is that to implement the new standard, overview of current cellular connectivity
more recent releases, especially LTE Cat-0, cellular operators only need to upgrade solutions:
1, M1, NB1, can provide the low power, low their network software without also install-
throughput, wireless technology required ing new antennas, a cost saving that can
by many modern IoT applications. Moreo- be passed on to cellular company clients.6
ver, the lower prices charged by mobile net- The commercial launch of solutions such
work operators for these standards are an as LTE Cat M is expected for 2017/20187,
advantage over regular cellular standards. and it might take some time until the global
rollout is completed.
6
Farnell | Trends in Cellular IoT Part 2
7
GSMA | Long Term Evolution for Machines: LTE-M
8
Trilliant | CellReader Digital AMI Cellular Solution
09Investing in Germany | A guide for Chinese businesses 10
The Future of Connectivity in IoT Deployments
b) LPWAN LoRa’s approach means that even crowd- Netherlands, WND in South America, and
The term LPWAN is made up out of two sourced networks are possible, with lower UK and Engie M2M in Belgium.
sub-terms: Low Power (LP) means that the cost gateways and a reach of a few kilome- Typical fields of IoT applications are pre-
hardware power consumption is generally ters. This is possible because LoRaWAN is cision farming in urban areas and fleet
very low and therefore can operate on not a company, but a standard maintained tracking, as these usually have only limited
small, inexpensive batteries for several by the non-profit LoRa Alliance. Each of or no cellular coverage, while high latency is
years. Wide Area Network (WAN) indicates the companies in the alliance profit in acceptable.
that the connectivity solution can bridge an some way from having an open standard
operating range that is typically more than for IoT applications, and the LoRa Alliance The following table provides a more de-
10 km in urban areas. It is important to un- promotes this standard to get the many tailed overview of LPWAN connectivity
derstand that LPWAN itself is not a connec- developers and companies on board. solutions:
tivity standard, but rather an umbrella term Implementation examples are KPN in the
encompassing various implementations Netherlands, Orange in France, and Digi-
and protocols that share common connec- mondo in Germany.
tivity characteristics.
Sigfox, on the other hand, is a single com-
Two examples of LPWAN implementations pany maintaining a patented, proprietary
are LoRa and Sigfox. While both solutions technology. They roll out and maintain their
rely on mobile network operators to adopt own network (sometimes through partner-
the technology and implement it across ships with network operators). They profit
geographies, they have very different busi- directly from subscription to their network.
ness models. Implementation examples are AEREA in the
Tab. 3 – Overview of LPWAN connectivity solutions
Max. Max. Power
Solution Frequency Range Throughput Encryption Topology Consumption Use
Logistics, utilities,
Various
LoRaWAN 15 km 50 kbps 128-bit AES Star on star Very low smart cities,
(sub-1 GHz)
industrial IoT
Asset tracking,
Sigfox 900 MHz 50 km 10 kbps N/A Star Very low mHealth,
remote monitoring
Smart metering,
Weightless Various 128/256-bit
5 km 10 Mbps (W) Star Very low asset tracking,
(W,N,P) (sub-1 GHz) AES
smart cars
Agriculture preci-
Various
Ingenu 500 km 38 kbps 128-bit AES Star Very low sion, smart grid,
(sub-1 GHz)
asset tracking
11Investing in Germany | A guide for Chinese businesses
II. Wired Solutions
Even though wired solutions might seem Wired IoT connectivity standards include
outdated at first view, they can turn out ANSI/CEA-709.1, a protocol initially devel-
to be important connectivity options in oped by Echelon Corporation and now
the IoT context. Often, wired solutions are used by the LonWorks solution, and ITU-T
applied when a) the 'thing', for example a G.9960, which is promoted by the Home-
machine, usually stays at the same location Grid Forum to detail the specifications of
and there is no need for mobility, and b) G.hn solutions for home networking. Also,
the distance between the sensor and the PRIME Alliance conceived a specification for
gateway is short. narrow-band powerline communication,
aiming to drive the evolution of intelligent
These solutions are usually aimed at metering solutions.
broadband applications, such as in-home
distribution of IPTV, Internet connectivity, The following table provides a more de-
and smart grids, where data is transferred tailed overview of current wired connectiv-
through the existing electrical wires in- ity solutions:
stalled within the building.
Tab. 4 – Overview of current wired connectivity solutions
Max. Max.
Solution Frequency Range Throughput Encryption Topology Use
Powerline solution for
HomePlug 100 m 500 Mbps 128-bit AES Bus extended wired
connectivity
IPTV, home networks,
G.hn N/A 1 Gbps 128-bit AES Multiple
smart grid
N/A
Municipal and highway/
LonWorks 1.5 km 78 kbps None Multiple
tunnel/ street lighting
Smart metering, smart
More than
PLC PRIME 128 kbps 128-bit AES Tree grids, street lighting
100 km
control
12The Future of Connectivity in IoT Deployments
IoT Connectivity
Use Cases
As already mentioned in the introduction, width however can be small, since data Other use cases for LPWAN:
every IoT application has unique require- about moisture levels is typically less than
ments when it comes to selecting the right a few Mbit. Also, latency does not need to •• Tracking the location of delivery trucks
connectivity solution. The following section be high, because conditions change slowly (Fleet Tracking)
provides an overview of selected use cases, and updates are required only a few times
which reflect different fields of IoT appli- an hour. All these connectivity require- •• Air pollution monitoring
cability and thus represent connectivity ments can be fulfilled by LPWAN solutions
challenges for different IoT applications. like LoRaWan or Sigfox. As described in the •• Home security
market overview, these connectivity solu-
a) Precision Farming tions usually have low-priced hardware and •• Tank flow monitoring
IoT contains considerable potential for in- long-range data transfer capabilities, and
creasing efficiency and reliability in farming. provide good connectivity coverage even •• Smart cities (Smart Lighting)
Sensors on the soil, for example, can collect in rural regions. In addition, most farms
data about moisture, temperature, alkalin- in rural areas today do not have cellular
ity, and potential threats from pests. This coverage at all, much less 4G/LTE, therefore
data is then transferred over long distances NB-IoT based on cellular connectivity is
to the farmer’s office, where it serves as currently not a viable option.
a valuable source of information for fur-
ther activities. If moisture is required, the
farmer now only needs to drive to specific
fields and irrigate them, which saves time
and water. In this area of IoT application,
IoT contains considerable potential
for increasing efficiency and relia-
connectivity hardware with low battery
consumption is required. Furthermore,
as fields are usually located in rural areas,
data needs to be transmitted over a long
range to the next base station. The band-
bility in farming. Sensors on the
soil, for example, can collect data
about moisture, temperature,
alkalinity, and potential threats
from pests.
13Investing in Germany | A guide for Chinese businesses
b) Wearables – Health Tracking c) Connected Cars –
In today’s performance-oriented society, Smart Traffic Management
many people have a deep desire to track Connected cars, or Vehicle-to-Everything
and optimize every part of their lives, a (V2X) communication, involves communica-
trend that includes fitness and health. tion among vehicles and between vehicles
Consequently, wearables like smartwatch- and roadside infrastructure. Real-time
es, fitness bands, and sleep trackers communication enables vehicles to deal
allow us to carefully monitor our sleep, with situations that neither the driver nor
workouts, and heartrates every minute the vehicle’s sensors could otherwise
of every day. In most cases, sensors built identify, enabling more predictive driving.
into the trackers send regular updates to In-vehicle information-based services
people’s smartphones or laptops. These increase road safety, improve driver com-
applications have specific requirements fort, and will enable fully automated driving
for connectivity solutions: First, the data in the future. While traffic information and
packages transferred are small, usually less diagnostic data do not generally require
than a few Mbits. Second, the connectivity low-latency connectivity, other applications
range is typically less than a few meters depend on reliable vehicle-to-vehicle com-
between a tracker attached to the body munication with low latency. When aug-
and a smartphone. In addition, the latency mented with Multi-access Edge Computing
required by this type of IoT application can (MEC), LTE advanced, NB IoT, and LTE V2X,
be high, as receiving an update about the LTE can provide a viable and cost-effective
heartrate every few minutes is more than solution that can accelerate the adoption
enough for most users. To avoid users of V2X communications in transport au-
having to charge wearables and smart- thorities and the automotive industry. The
phones every few hours, the connectivity hybrid use of the LTE portfolio will meet au-
solution should enable an energy-efficient tomotive industry needs on the way to 5G.
data exchange. The most suitable connec- It provides support for automated driving,
tivity solution for short ranges is Bluetooth. increased comfort, and improved infotain-
This solution, designed for mobile personal ment, as well as increasing road safety and
area networks (PANs), is characterized by traffic efficiency.9
low frequency, low data throughputs, and
a limited connectivity range. The recently
published Bluetooth Low Energy (LE) stand-
ard is designed for low-power data trans-
fers, with implementation expected in 90%
of smartphones by 2018.
Every IoT application has unique
Other use cases for Bluetooth: requirements when it comes to
•• Connected home (Smart Temperature)
selecting the right connectivity
solution.
9
Nokia White Paper | IoT Connectivity – Understanding the options & choices
14The Future of Connectivity in IoT Deployments
d) Health sector – a more cost-efficient manner, while contin-
Connected Medical Devices uing to use existing mobile networks for
The health sector is increasingly driven by use cases demanding more throughput
cost efficiencies, result-based compensa- and latency.
tion for treatments, and patient well-being.
IoT can play an important role in address- Other use cases for cellular:
ing the changing demands of patients,
professionals, hospitals, and insurers in this •• Real-time surveillance monitoring
respect.
•• Connected cars
For instance, connecting medical devices
in patients’ homes allows important opera- As an intermediate summary, we can state
tional data to be gathered, which generates that different IoT applications require differ-
value in numerous use cases. Through ent connectivity characteristics.
geo-fencing, device owners can ensure that
the devices in their fleet remain at the des- Use cases located in rural areas require
ignated location, minimizing the financial long-range connectivity standards to
damages resulting from loss or theft. Other connect to base stations far away, while
operational data tell them the status of the those located near cities and with close
device, enabling preventive maintenance access to base stations or gateways can
and battery replacement, and minimizing rely on short-range connectivity solutions.
the number of routine inspections by Moreover, use cases that rely on a short
mechanics, which not only enables cost interval between data generation and
savings in the field force, but also reduces action should focus on deploying solutions
intrusive visits to the patient’s home. with low latency, such as cellular LTE Rel.8,
while use cases that do not require im-
Although privacy and cyber security issues mediate action can accept standards with
need to be addressed, remotely sharing higher latency, such as Sigfox. High band-
medical data will enable doctors to improve width standards like LTE Rel. 8 are impor-
their diagnostics, because they have access tant when the data packages collected by
to a wider range of relevant data, while sensors and sent by a 'thing' are large. In
patients benefit from a potentially lower cases where only small data packages need
number of hospital visits. to be sent, it is worth considering solutions
like LoRaWAN. Cost is another considera-
With new low-power wide area (LPWA) tion, so when the costs of deploying and
technologies like NB-IoT, these use cases maintaining the connectivity solution are
become more attractive. This is due to their high relative to the cost of the 'thing', that
enablement of companies to deploy solu- is, when operating many small sensors
tions transmitting small amounts of data, in with low hardware value, usually low-cost
hard to reach (indoor) locations, for longer connectivity solutions such as LTE Cat-M
periods of time (less energy consumption are appropriate.
means longer battery life), and therefore in
15Investing in Germany | A guide for Chinese businesses 16
The Future of Connectivity in IoT Deployments
Long Term Implications
With the increasing quality of connectivity, more and
more value-generating IoT use cases can be deployed
for the benefit of people and organizations.
NB-IoT already makes it possible to connect could be offered for more price-sensitive
to more devices, in more difficult to reach uses cases like tracking bulk containers
areas, and at lower battery consumption, during road or rail transport. All these
than other connectivity technologies aspects combined mean that organizations
before it. However, with the deployment will have access to connectivity technology
of 5G technologies in the near to medium that enables scaling up of their current
future, a truly big shift in IoT will take place: proof-of-concept setups.
Key characteristics of 5G enable large-
scale IoT adoption and success to a degree Mass deployment of 5G-enabled applica-
which is impossible with the current state tions has a major impact on the architec-
of connectivity technology. Two of those ture supporting the application. To keep
key characteristics are lower latency and the right balance between performance
higher throughput. The combination of and infrastructure costs, applications will
these aspects enables real-life implemen- need to be able to scale with actual (and
tations of use cases that are currently only forecasted) demand. Incorporating intel-
possible in small-scale lab environments, ligence at the edge of the application’s
such as self-driving cars, remote surgery, network, or even in the connected device
remote construction robots, and real-time itself, is another way of reducing stress on
AR/VR applications. However, lower laten- the back-end infrastructure.
cy and higher throughput alone are not
enough for the large-scale adoption of such A different barrier for cost-efficient mobile
use cases. Two other key aspects enable IoT use cases is the physical SIM needed
mass adoption of these types of innova- to connect to cellular networks. Various
tions: support for more simultaneously developments, such as embedded SIMs
connected devices and a more efficient and connectivity management platforms,
use of energy. Finally, 5G makes ‘network allow connected equipment manufacturers
slicing’ possible, a technology that ena- to switch between networks and providers
bles network operators to create multiple without physically adjusting the connect-
(virtual) networks within one network. This ed device (i.e. no change of SIM needed).
means that different priorities, availability, This enables improvement of connection
latencies, and throughput can be set to quality and new cost reduction scenarios
meet the requirements of different uses by dynamically selecting an operator/net-
cases; for instance, mission-critical latency work based on local signal quality and data
can be provided for applications relating to costs.
self-driving cars, while de-prioritized traffic
17Investing in Germany | A guide for Chinese businesses
Business Implications
The dynamic market for IoT applications by IoT. For example, a vendor of coffee ma-
and connectivity requires an ecosys- chines may start offering a usage-based
tem-oriented business mindset to be model instead of selling individual ma-
successful. The complex nature of IoT chines or subscriptions. In that case, a
applications results in involvement of consumer would buy a coffee subscription
several specialized parties to realize an and receive a connected coffee maker that
application: e.g. device and sensor manu- charges the customer a fixed fee, or even
facturers, software vendors, connectivity by the cup. The vendor receives usage and
network providers, connectivity man- maintenance data to optimize the mainte-
agement providers, cloud (storage and nance and coffee bean delivery schedule.
processing) providers, analytics platform This new business model is made acces-
providers, orchestrators etc. Some players sible through the application of IoT tech-
will combine various ecosystem functions, nology. On the other hand, costs can be
but in the end, close collaboration and reduced with IoT through timely delivery
orchestration will be necessary to realize of maintenance information. For example,
valuable IoT use cases. Organizations will having accurate status and maintenance
need to have or develop the capability to information reduces the chance of an
manage their partnerships effectively and engineer routinely investigating a device
create trust-based business relationships. only to find everything is running smooth-
Sharing resources is inevitable in such ly. Instead, advanced predictive models
ecosystems (e.g. the connectivity network, can be used based on actual usage and
potentially also various platforms), which diagnostic data provided by the connect-
further emphasizes the need for trusted ed machine/device. In that case, operating
and capable partners. costs can be optimized through higher
uptimes and lower maintenance costs.
When successfully deployed, IoT applica-
tions have the potential to improve com-
panies’ revenue and costs by reinventing
the way in which they do business. On the
When successfully deployed, IoT
applications have the potential to
one hand, revenue can be improved by
launching new business models enabled
improve companies’ revenue and
costs by reinventing the way in
which they do business.
18The Future of Connectivity in IoT Deployments
Summary
The Internet of Things (IoT) is praised by At Deloitte, we believe that organizations drivers like hardware. Generally speaking,
experts around the globe as the beginning should first determine their needs before short-range and LPWAN solutions require
of the next industrial revolution. If a com- they can successfully select, plan, and more CAPEX, whereas cellular results in
pany’s product is not connected and the deploy the right connectivity solutions. OPEX. Furthermore, it is important for any
business model does not include a service An organization’s needs in this case are organization to ensure future flexibility
component, it is likely to miss substantial derived directly from the connectivity and avoid lock-ins and costly changes
opportunities for increasing efficiency requirements of the IoT applications in caused by dependence on SIM cards
throughout the value chain, and thus faces the company’s application landscape. As already installed.
the risk of falling behind its competition. already outlined, there are several factors
Companies that invest in setting up a that need to be weighed and balanced, for The complexity that comes with the selec-
useful IoT application landscape today, example the required battery life, network tion process of IoT connectivity solutions
however, are very likely those who will be coverage, data range, and latency. Moreo- might seem intimidating to organizations.
rewarded with a cutting-edge competitive ver, it should be considered that non-con- Deloitte is convinced that it takes experi-
advantage tomorrow. nectivity requirements of the underlying ence, knowledge, and expert guidance to
IoT applications inside an organization are master this task. However, organizations
An important component in designing an likely to change over time. For example, should be reminded that investing the
IoT ecosystem in an organization is the the selection of data that is gathered at time to carefully evaluate and plan con-
selection of the underlying connectivity the beginning of an IoT application’s life cy- nectivity options for the IoT ecosystem
solution that the IoT application uses to cle might differ significantly from the data will very likely be rewarded with significant
transfer data from the sensors attached that is gathered once specific patterns in cost savings and/or productivity gains
to 'things' to the data-processing appli- the data have been analyzed. Thus, having once the right connectivity solution has
cations and derive ‘smart’ decisions or flexibility in contract designs can turn out been selected.
insights. The sheer variety of connectivity to be a great asset in the end. Once the
solutions available today, however, is requirements are understood, companies
overwhelming for organizations all around should place a strong focus on clustering
the globe. Different use cases in this white their different IoT applications by their
paper showed that there really is no ‘one respective connectivity requirements and
size fits all’ solution, as each of those IoT select IoT connectivity solutions that pro-
applications fields comes with different vide unique characteristics to satisfy the
challenges and requirements regarding demands of each cluster. Incorporating
its connectivity solutions. Therefore, only this approach in the selection process of
the companies that select the most appro- IoT connectivity solutions will likely lead to
priate connectivity solutions for their IoT a more efficient and holistic setup of the
ecosystem can leverage the full potential organization’s IoT ecosystem.
of IoT.
While choosing the right connectivity
So what can organizations do today in type(s) for the company’s uses cases,
order to make smarter decisions during careful consideration needs to be given to
the selection process of IoT connectivity the different OPEX drivers, such as fixed or
solutions? volume-based fees (for cellular connectiv-
ity), energy consumption and installation,
repair, maintenance fees, and CAPEX
19Investing in Germany | A guide for Chinese businesses Acknowledgments Special thanks to the people who con- tributed to this publication in terms of researching, providing expertise, and coordinating: •• Erik Bookholt Senior Consultant Consulting Netherlands •• Bruno Marques Pires Senior Consultant Consulting Portugal •• Florian Berg Consultant Consulting Germany •• Jan-Hendrik Adolphs Senior Consultant Consulting Germany •• Tobias Pascal Heß Consultant Consulting Germany •• Andreas Wohlfahrt Manager Consulting Germany 20
The Future of Connectivity in IoT Deployments
Contacts
Dr. Gunther Wagner Andreas Staffen Tim Paridaens
Director | Technology Strategy & Director | Technology Strategy & Director | Technology
Architecture Architecture Deloitte Belgium
Deloitte Germany Deloitte Germany Tel: + 32 (0)497 4868 16
Tel: +49 (0)151 5800 4656 Tel: +49 (0)151 5807 0471 tparidaens@deloitte.com
guwagner@deloitte.de astaffen@deloitte.de
Helena Lisachuk Marc Beijn
Director | Technology Director | Technology
Deloitte Netherlands Deloitte Netherlands
Tel: +31 (0)68 3339 739 Tel: +31 (0)68 2019 400
helisachuk@deloitte.nl mbeijn@deloitte.nl
21Investing in Germany | A guide for Chinese businesses
The Future of Connectivity in IoT Deployments
23This communication contains general information only not suitable for addressing the particular circumstances of any individual case and is not intended to be used as a basis for commercial decisions or decisions of any other kind. None of Deloitte Consulting GmbH or Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/de/UeberUns for a more detailed description of DTTL and its member firms. Deloitte provides audit, risk advisory, tax, financial advisory and consulting services to public and private clients spanning multiple industries; legal advisory services in Germany are provided by Deloitte Legal. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 263,900 professionals are committed to making an impact that matters. Issue 03/2018
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